Three factories to close
After the announcement by the head of the works council Volkswagen plans to close at least three factories in Germany and reduce jobs, the newspaper said that if you look at the profits of the Volkswagen Group, this decision seems surprising. In 2023, the company’s profit amounted to over EUR 22 billion, Die Zeit reported, citing Bloomberg data. This is more than BMW and Mercedes earned, respectively.
Worse sales
However, as the weekly’s website pointed out, The Volkswagen group no longer sells as many cars as before the coronavirus pandemic. Moreover, own-brand vehicles are much less frequently purchased than sister brands Skoda or CUPRA, also owned by the concern.
Volkswagen is selling fewer and fewer vehicles with combustion engines, especially in China. There, the transition to e-mobility is progressing much faster than in Europe, and the Chinese are more willing to buy from domestic producers, including: due to price and better digitization, the newspaper noted.
High employment and energy costs
In addition to the sales crisis, the Volkswagen Group is weakened by costs and the growing number of employees, both at plants in Germany (an increase of 17% from 2023) and worldwide (an increase of 21.5%).
According to the director of the Institute of Automotive Economics, Stefan Reindl Factory employment must fall dramatically because “too many workers are currently building too few cars.” With profits so low, Volkswagen cannot make the necessary investments in e-mobility or software. Developing a new electric car costs several billion euros, explained Reindl, quoted by Die Zeit.
The newspaper also noted that the Volkswagen group was being charged high wages, energy costs and bureaucracy. Other brands of the concern, such as Seat CUPRA and Skoda, record profits because most of their vehicles are produced abroad – we read in “Die Zeit”.
Jobs
“Volkswagen therefore faces two main problems: poor sales results and too high costs. (…) If the company, and especially the main brand (Volkswagen – PAP), does not manage to sell more cars soon, there is no reason to believe that all high-cost jobs in Germany can be maintained,” it concluded.
Volkswagen Group announced on Monday that it plans to close at least three factories in Germany and lay off tens of thousands of workers. The head of the company’s works council, Daniela Cavallo, announced that job reduction plans apply to all Volkswagen plants in Germany. This company employs approximately 120,000 people. people in the country.
From Munich Iwona Weidmann (PAP)
